Gibson cues up for mass market

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In the music world, the Gibson brand has been associated with high-end, professional-grade instruments traditionally sold in music stores. Now the 110-year-old manufacturer is branching out into the mass market.

Nashville-based Gibson Guitar Corp. is debuting a new line of entry-level musical instruments to be sold in "big box" retail outlets that carry everything from toiletries and CDs to furniture and vacuum cleaners.

Though Gibson already has sold its Epiphone brand products in some retail outlets besides music stores, it has now created its first division focused solely on mass-merchant accounts.

The company has lined up several large retailers to start selling guitars, band instruments, drums and amplifiers this summer, said Henry Juszkiewicz, Gibson's chairman and chief executive officer. He declined to disclose the retailers at this point.

To achieve the price range of $50 to $200, which he called the "sweet spot" for mass merchandising, the company is having its instruments made in China, where it already has a manufacturing plant to handle its Epiphone line, which has been its lower-priced brand, selling at $500 and up.

Gibson is among several instrument makers contributing to a resurgence in the mass-marketing of instruments. Early in the 20th century, people could buy instruments ranging from Silvertone guitars to large pianos in department stores such as Sears & Roebuck.

"It really [went] out of fashion in retailing, and almost the only instrument that was sold [in the mass market] was Casio keyboards," Juszkiewicz said. "But I would say over the last five years, as music has become apparently more lucrative and a little more stable, retailers started experimenting with musical instruments outside of just the small keyboards. And I personally have noticed guitars in such unusual places as CompUSA."

Gibson is entering a market blazed recently by First Act, a seven-year-old Boston company that sells a variety of instruments, including guitars and band instruments, starting at about $150, in stores such as Wal-Mart and Sam's Club.

"We do feel like First Act is a pioneer in that retail space," said Jeff Walker, First Act's vice president of marketing. "It has always helped us establish our mission, which is making playing music more accessible and affordable to the thousands and millions of Americans who ordinarily wouldn't have been able to play music."

Juszkiewicz said a large segment of consumers are often intimidated by the thought of going into a music store.

"Most parents do shop at Target or Wal-Mart or Toys R Us, so we are making music instruments at the beginners level accessible, giving them that choice," he said. "In fact, I think with the pricing you can get an instrument and test a child's aptitude and liking for music for less than a video game console. So it makes it a very low-risk sort of decision."

To underscore the division's commitment to music education, Gibson has arranged to donate a percentage of its sales of the new product line to five organizations: the National Foundation for the Advancement of the Arts, Music Educators National Conference, The Grammy Foundation, VH1 Save the Music Foundation, and Music Teachers National Association.

Apparently, making music in the United States has never been more popular. Sales of musical instruments and products in 2004 hit an all-time high of $7.35 billion last year, according to the International Music Products Association (NAMM).

The fastest riser has been guitars, with sales of acoustic guitars surging 38.6 percent from 2003 to 2004 and electric guitar sales rising 43.5 percent during the same period.

"Basically, guitars are sufficiently inexpensive that they have an impulse quality that they never did before," said Brian Majeski, editor in chief of Music Trades magazine, noting that Fender has begun selling products in Costco.

Not everyone, however, is embracing the mass-marketing of instruments with open arms.

"The feeling amongst the music product industry is a good-news, bad-news situation," Scott Robertson, NAMM spokesman, said. "I think the industry is split about it, much in the way they're split about a lot of things, like selling music products on the Internet."

George Gruhn, proprietor of Gruhn Guitars on Broadway in Nashville, says he's not worried because he caters to high-end customers. But he predicts other music store owners will have a mixed to negative reaction to Gibson's strategy.

"I think many other retailers do sell student-model introductory guitars, and they resent having the companies, such as Gibson, supplying better deals on cheaper stuff to stores such as Wal-Mart," he said.

Majeski believes music stores have nothing to worry about, as the new products target a different market. "Our sense on this mass-marketing stuff in the big channels is that it hasn't really had much of an impact on the traditional MI [musical instrument] business," he said.

Juszkiewicz said the average new retail account will carry between three and 10 product types, each branded specifically for that retailer. Gibson's name will be only on the box as manufacturer, he said, so as to avoid confusion with Gibson brands sold in traditional outlets.

As it prepares to launch the new line, Gibson is in search of a new site in Nashville for a major distribution facility for it. "One of the things we're going to be looking for is the ability to expand pretty rapidly," Juszkiewicz said, "because this could be huge."
 
The glory days of Gibson ware way over!!! Gibson just plain sucks!!! I've not seen a Gibson that didn't needed some work for the longest time!!!
 
gibson said:
so we're gonna get gibson's version of highway 1 ??
or will it be even cheaper ???

the Highway 1 is actually Fender's version of Gibson's Faded series. the Faded series came out before the fender highway series, and featured satin finishes with only a very thin polyurethane finish to cut down the cost.
 
i've been flamed for saying this before but i stand my ground- making Gibsons more affordable is an applaudable idea, but it's simply a sign of the time$... you are free to believe in whatever philosophy the company puts forth but Gibson is still an industry player & they have to keep up. let's see what they have to offer, maybe it's good for us...
 
Gibson already has a significant market share in the high end sector of Guitars (of course some of us will say that their quality ain't high end...). Epiphone was created to compete for the mid-range-budget musicians who desires but cannot afford the real thing.

Now... mass market... Quite a good move because they can label these guitars "Company of Gibson" and of course entry-level consumer (already knowing the brand Gibson) will put their money in the cheap stuff regardless what they name it. Hence casting their nets to anyone with low budget. E.g. Sigma by Martin etc...

But personally I wouldn't expect anything extra ordinary coz they would be shooting themselves in the foot especially for Epiphone range. If there is anything more than just getting a bigger piece pie, it would be to help maintin or increase their pricing for Epiphone and Gibson guitars.

Cheers!
 
the person who sets the prices of gibson oughts ta be shot... :smt066:smt071 :smt070 :smt067 :smt068 (mr set the price very high)
 
haha... spikes, i agree with you. shoot the guy down man! :) and my guess is, after launching these low cost guitars, it will be another opportunity for them to hike up their Gibson guitars in near future...

seriously, our consumer market in terms of musical instruments are not mature yet. hence we are still dependent on brands. there are alot of alternatives out there that cost a fraction of the price of Fender / Gibson / PRS etc but sounds and feel just as good and if not better.

what we need to do is dare to try, and change our mind set about owning something that is "alternative" to a certain brand. if you like to sound and feel - don't need to care about brand. end of the day people listen and not watch a guitar.

cheers!
 
actually, stock Gibson and PRSs are good guitars in their own right, but it's the custom shop stuff that's really making waves. The difference is really plain for everyone to see, from prices to details.

well, IMO, i agree with sub, that Gibson, no matter how big a player they are already, still will want the best of the market. Check out Ibanez. Their JEM and custom series can go for almost S$3-5k, whilst lower end ones cost a fraction, at an affordable $100++, and this does not 'down' its brand too. However, it's a big risk to take, just in case they end up like the yamaha brand (which wouldn't happen really..i think?), their stuff are labelled as 'nowhere here, nowhere there' stuff, but i personally think that there are quality guitars and value for money stuff with the yamaha logo on it. From the entry level to the high end PAC stuff, they do have their pros and cons, and are not entirely nowhere here nowhere there.

well... i still find custom made guitars more interesting..hehe..
 
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